Lower Rents Driving U.S. Retailers to Expand, CB Richard Says

Fifty-nine percent of retailers surveyed said “compelling
rent levels” are encouraging them to expand, according to
Anthony Buono, executive managing director of CB Richard Ellis’s
retail services group for the Americas. The company, based in
Los Angeles, is the world’s largest commercial real estate
services firm.

“A significant number of retailers will be taking
advantage of an opportune time for growth,” Buono said in an e-
mailed statement. “Luxury goods, wholesale clubs and
discounters in particular are expected to continue to expand.”

Vacancies at U.S. regional malls and shopping centers rose
in the second quarter as the jobless rate remained above 9
percent and online competition grew, Reis Inc. (REIS), a New York-based
real estate research company, reported in July. Rents at
regional and super-regional malls are down 5 percent since
peaking in the third quarter of 2008. At community and
neighborhood shopping centers, rents are 3 percent below their
peak reached in the second quarter of the same year.

The U.S. economy should regain momentum through the year,
according to CB Richard Ellis’s report. The “confluence” of
U.S. and European debt problems, turmoil in the Middle East,
destructive weather in the U.S. and Japan’s earthquake “has led
to a painfully slow recovery, but one that will not be
derailed,” Buono wrote.

Views of Economy

About 27 percent of retailers view the U.S. economy as
improving, compared with 35 percent a year earlier. The survey
showed 45 percent of retailers see the economy as stable, up
from 35 percent. Another 27 percent said recovery has already
occurred within their market segment.

Use of social networks is increasing, with 93 percent of
retailers saying they rely on services such as Facebook and
Twitter to market their products, up from 70 percent a year
earlier.

CB Richard Ellis’s annual survey of U.S. retailers was
taken during June and July. Of about 200 surveyed, 58 percent
are national retailers, 26 percent are global and 15 percent are
regional, according to the report.